(3) ACQUISITIONS AND DIVESTITURES

In September 2016, the Company sold approximately 55,000 net acres in West Virginia for an adjusted sales price of approximately $401 million. The Company accounted for the sale of these natural gas and oil properties as adjustments to capitalized costs, with no recognition of gain or loss as the sale did not involve a significant change in proved reserves or significantly alter the relationship between costs and proved reserves. In September 2016, $48 million of the net proceeds was used to repay borrowings under the Company’s term loan entered into in November 2015. The Company used the remaining net proceeds from the sale for general corporate purposes, including to fund capital projects.

In May 2015, the Company sold conventional oil and gas assets located in East Texas and the Arkoma Basin for approximately $211 million. The Company accounted for a portion of the sale of these natural gas and oil properties as adjustments to capitalized costs, with no recognition of gain or loss as the sale did not involve a significant change in proved reserves or significantly alter the relationship between costs and proved reserves. Approximately $205 million of the proceeds received were recorded as a reduction of the capitalized costs of the Company’s natural gas and oil properties in the United States pursuant to the full cost method of accounting. The proceeds from the transaction were used to reduce the Company’s debt.

In April 2015, the Company sold its gathering assets located in Bradford and Lycoming counties in northeast Pennsylvania for an adjusted sales price of approximately $489 million. The net book value of these assets was $206 million and was held in the Midstream segment as of the closing date. A gain on sale of $283 million was recognized and was included in gain on sale of assets, net on the consolidated statement of operations. The assets included approximately 100 miles of natural gas gathering pipelines, with nearly 600 million cubic feet per day of capacity. The proceeds from the transaction were used to repay a portion of the borrowings under the Company’s $500 million term loan facility entered into in November 2015, which subsequently has been repaid in full.

In January 2015, the Company completed an acquisition of certain natural gas and oil assets including approximately 46,700 net acres in northeast Pennsylvania from WPX Energy, Inc. for an adjusted purchase price of $270 million (the “WPX Property Acquisition”). This acreage was producing approximately 50 million net cubic feet of gas per day from 63 operated horizontal wells as of December 2014. As part of this transaction, the Company assumed firm transportation capacity of 260 million cubic feet of gas per day predominantly on the Millennium pipeline. The firm transport is being amortized over 19 years. As of December 31, 2017 and 2016 the Company has amortized $26 million and $17 million, respectively. This transaction was funded with the revolving credit facility and was accounted for as a business combination. The following table summarizes the consideration paid for the WPX Property Acquisition and the fair value of the assets acquired and liabilities assumed as of the acquisition date:


Consideration:		(in millions)
Cash	$	270
Recognized amounts of identifiable assets acquired and liabilities assumed:
Assets acquired:
Proved natural gas and oil properties		31
Unproved natural gas and oil properties		114
Intangible asset		109
Gathering system		22
Other		1
Total assets acquired		277
Liabilities assumed:
Asset retirement obligations		(7)
Total liabilities assumed		(7)
	$	270

In January 2015, the Company completed an acquisition of certain natural gas and oil assets from Statoil ASA including approximately 30,000 net acres in West Virginia and southwest Pennsylvania for $357 million, which was comprised of approximately 20% of Statoil’s interests in the properties, (the “Statoil Property Acquisition”). This transaction was accounted for as a business combination. The Company allocated the purchase price to natural gas and oil properties, based on the respective fair values of the assets acquired.

The above acquisitions qualified as business combinations, and as a result, the Company estimated the fair values of the assets acquired and liabilities assumed as of the acquisition date. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements also utilize assumptions of market participants. The Company used discounted cash flow models and made market assumptions as to future commodity prices, projections of estimated quantities of natural gas, oil and NGL reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. These assumptions represent Level 3 inputs, as defined in Note 6 – Fair Value Measurements.